Industry At A Glance: Value-Added Management & Documentation

Markets have become increasingly differentiated at all levels. The result is that producers now have a variety of means to garner additional revenue from their respective management and genetic decisions[3] over time. Those opportunities are best illustrated by data available through Superior Livestock Video Market sales over the period 2001-2010. The graph illustrates calf market premiums and discounts across several major categories (health management[4] and genetics).

The premiums highlighted above are cumulative. That is, producers can be rewarded in the market for both health management and genetics. For example, a producer who invested in a VAC 45[5] program and possessed documentation for Angus-based loads would have received over $11/cwt in premiums.

That brings us to what’s perhaps the most important takeaway from all of this. The significance of documentation and/or certification to ensure receiving proper compensation in the marketplace can’t be understated. Considering the relatively minimal amount of time and/or effort required to provide documentation, the effort provides an excellent dividend[6].

Feeder cattle markets[7] have changed, and they’ll likely become even more complex and granular in the future as the industry seeks downstream value attributes[8] and sourcing efficiency. How has your operation adapted to changes in the market and how will you prepare for even further transition down the road?